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This topic comprises 5 pages: 1 2 3 4 5
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Topic: Marcus Now Equipping D-Cinema
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Chad Souder
Jedi Master Film Handler
Posts: 962
From: Waterloo, IA, USA
Registered: Feb 2000
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posted 09-14-2006 06:00 PM
quote: Mark Gulbrandsen Gord, If you read something like that please post the story and/or whre you read it.
It's a well-known fact that interest rates float. The source is any bank you choose to call.
As far as bank loans go, if Dolby is rating the life expectancy of a server at 15 years, you are not going to get a loan that can be paid back over that same amount of time. First off, banks do not loan 100% of the purchase value. Usually 75% is standard, so you still have to come up with the remainder. Also, banks like to stay ahead of the depreciation of the equipment. Whatever the useful life is on the purchase and what the resale value is estimated to be play a large role in what that loan will be and what the interest rate will be. For example, most new car loans are only a 5 year, regardless of the fact that the car will still have a substantial resale value after the 5 years and after the car is dead it still has a resale value. What will be the resale value of this equipment after the useful life? Again, if 15 years is the projected life, then a 7 year loan would be realistic, unless there is a large down payment. It also makes a difference if you are borrowing on a single item or if it would be a blanket security agreement. In the case of a theatre chain, they would have other assets, such as real estate, to offer as collateral, thus dropping the interest rate on the loan the bank would offer. In a small operation, your collateral is limited and you would not get the same, low rate.
It seems to me as if at this point it would be decidedly UNaffordable for a small one or two screen theatre to self-finance a conversion.
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This topic comprises 5 pages: 1 2 3 4 5
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